By Mairi Mallon Bermuda's economy is showing signs of slowing down, according to Shadow Finance Minister Grant Gibbons.

And he said this year was shaping up to be the worst year Bermuda has seen in 20 years.

"There is a definite cooling down of the Bermuda economy,'' he said.

Dr. Gibbons added that some of the signs of the slowdown included the economy losing nearly $20 million from visitor spending and $50 million from construction projects in the first three quarters of 2000.

And he has now called on Government to cut spending in a bid to brace itself for a possible economic slump in the United States.

Dr. Gibbons said that the latest statistics from Government show a slowdown in retail, visitor spending and in the construction industry -- all factors that point to a slump in the economy.

Dr. Gibbons said: "Both visitor spending and the construction industry spending are indicators of economic growth. This, added to the slump in retail and the almost doubling of bad debt reported in the Bermuda Sun this week and what is happening in the United States and you get the bigger picture.'' He said that air visitor spending was almost identical in the first three quarters of 1997, 1998 and 1999, and if inflation was taken into consideration, there was a slight dip.

But in the first three quarters of 2000 it had dipped dramatically by $19.4 million, from $384.6 million in 1999 to $365.5 million in the same period in 2000.

And he said that visitors per capita were also spending less in the first three quarters of 2000 compared to previous years.

"That is the first real decline in figures for visitor spending we have seen.

Not only that, but the ones that are coming are spending less. The decline in visitor spending is more than a head count.'' He added: "This could be a difference between the mix of small and large hotels, but we have still got Elbow Beach and the Hamilton Princess at the top end. But all of a sudden we have lost $20 million in this year compared to last.

"Its impact will not only be felt in the hospitality industry. It is not just the hotels that rely on tourists, but restaurants and shops and that sort of sector. This is a large fall all of sudden.

"As David Dodwell said, this is shaping up to be the worst year in 20 years.

We are seeing not as high visitor numbers in an increasingly declining industry.'' In the construction industry he said Government statistics showed the value of new projects in 2000 was down $52.6 million to $45 million for the second and third quarters of 2000, compared to the same period the year before.

"That is a drop of 50 percent in the amount of new projects in this period.

It represents a loss of spending in the economy as well. There will also be an impact on jobs in the construction industry going forward. This would predict a level of dropping off in the private sector.'' He said that add to this a cooling off in the retail industry and the figures from the Bermuda Credit Association which showed a doubling of bad debt, and the outlook was not good.

He said the federal reserve was keen to keep the United States economy from a slump, but that Bermuda was very dependent on the United States for much of its business.

Gibbons fires warning shot over economy He said the decline in the US GDP from five percent to 2.5 percent affected the discretionary spending of Americans, which in turn affected the amount American tourists spent on travelling abroad.

"I suspect it will have an impact on visitors coming here and visitor spending,'' he said.

And he added that a cooling off in the United States economy and stock market could adversely affect international business on the Island. He said: "The stock market could have an impact on the start up of new businesses.'' "In the face of all this, the Government should be trimming its sails.'' He said that the Government should not be increasing expenditure by three to four times the rate of inflation when the US economy was showing signs of trouble.

"What is going on in the US is definitely a cooling down if not an end to the boom years there. Clearly here the Government should be aggressively beginning to trim its sails.'' Dr. Grant Gibbons